Labor Market Policy Research Reports, February 2019

CEPR regularly publishes a curated collection of original research from academic institutions and nonprofits on the state of the US labor market. The compilation is part of our ongoing effort to promote informed debate on the most important economic and social issues that affect people's lives.

In November 2018, the Trump administration prioritized and signed a revision to the Northern American Free Trade Agreement (NAFTA) that was rebranded as the US-Mexico-Canada Agreement (USMCA). Unfortunately, President Trump’s agreement fails to deliver on strong labor and environmental standards that workers need. Specifically, the revised agreement fails to address climate change in trade and expands monopoly protections for pharmaceutical companies that would keep US drug prices rising. This report describes what a meaningful alternative to NAFTA requires by discussing NAFTA’s economic effects on US workers and proposing recommendations that could be used to rewrite NAFTA that supports the middle class, the environment, and cooperative relationships in all three countries.

In the absence of a national paid family and medical leave insurance program, various states have implemented their own family leave program including California, New Jersey, and Rhode Island. These states have the longest track records in implementing paid family leave, but yet each state struggles with low awareness and usage for the workers who need it most. This report first analyzes the projects developed by the Family Values @ Work network in these three states that sought to raise awareness. Additionally, the report provides lessons and guidance for advocates with paid family and medical leave programs in raising awareness about paid leave for those who need it most.

Although all Americans’ earnings are subject to the Social Security payroll tax, the tax distribution is unequal for high-income earners. Regardless of total earnings, the maximum wage earnings subject to payroll tax is $132,900. This report examines proposals to tax earnings above the current payroll tax cap which would ensure high-income earners pay similar rates as everyone else and address the impact of rising wage inequality on financing Social Security benefits.

On January 2019, Sen. Bernie Sanders and Rep. Bobby Scott introduced a bill titled the Rage the Wage Act of 2019. This bill would raise the federal minimum wage in six steps to $15 an hour by 2024. This report describes the population of workers likely to receive higher pay under the proposed increase to $15 by 2024 with specific demographic data as well as the effects the rise would have on businesses, employment, and low wage workers’ welfare.

Since 2000, wage growth has been the strongest for the high-wage workers, perpetuating the trend of rising wage inequality over the past few decades. This report examines current hourly wage trends through 2018. Analyzing data from the Current Population Survey (CPS), the author finds that although some workers saw modest wage growth in 2018, large gaps by gender, race, and education attainment level persist. Some of these same gaps have even increased within the last year.

Although labor markets in cities are vastly more educated and skills-intensive than decades prior, urban non-college workers perform significantly less skilled work than in previous decades. This shift can be attributed to automation and international trade which has eliminated a vast amount of non-college production, administrative support, and clerical work. The author argues that the erosion of urban non-college occupational skills has led to a fall in real non-college wages by deterring non-college workers out of non-college middle-skill occupations into low-wage occupations that require minimal skills, reducing the share of non-college workers that have middle-skill occupations in high-wage cities, and weakening of steep urban wage premiums for non-college workers that succeeded in previous decades.

As the share of older immigrant workers in the US begins to rise, understanding immigrants’ retirement behavior and security compared to natives becomes extremely important. Using data from the Health and Retirement Study (HRS), the authors examine immigrants’ retirement and Social Security claiming patterns compared to those of natives. The report finds that immigrants are less likely to retire or claim Social Security in their early 60s compared to natives and more likely to retire in the US rather than abroad.

This report illustrates the potential role of Universal Basic Incomes (UBIs) in advanced countries. A large component of advanced economies is the existence of safety nets. The authors develop a framework for describing transfer programs then use the framework to compare different UBIs to the various programs in the US. The authors then identify potential impacts of a UBI and the beneficiaries of such an inclusive program.

In this report, the authors examine the labor market trends of stagnant US wage growth, rising wage inequality, and the falling labor force participation of prime-age men with a concentration on outcome for males without a college education. The authors discuss reasons for the decline including adjustment frictions correlated with labor market shocks and changes in the marriage market on male labor supply incentives. The report argues in favor of the decline in wage and participation being attributed to falling labor demand and separately-acting casual factors which have disproportionately affected men without a college education

Over the past several decades, the economic progress of US men has been stagnant, especially for less educated and non-white men. This report examines the broader context of prime-age men economic stagnation by observing changes in education, mortality, morbidity, disability program receipt, family structure, and incarceration rates over time. The authors aim to use the data from these indicators in order to answer why prime-age men have had such sluggish economic progress.

Using data from the Annual Survey of Entrepreneurs, the report estimates the differences in innovation behavior between foreign and US-born entrepreneurs in high tech industries. The authors found significantly higher rates of innovation in immigrant-owned firms for 15 of 16 different innovation measures. The advantage immigrant entrepreneurs have also encompassed older and startup firms as well as entrepreneur’s education attainment levels.

This report examines the likely effects of the proposed bill to raise the federal minimum wage to $15 by 2024 on the number of jobs, specifically in low-wage states. The author then analyzes whether the federal floor should vary due to high regional living costs and subminimum wages for tipped workers and youth. Lastly, the report reviews the positive effects of minimum wages on the physical and mental health of both children and adults.

Despite recent economic growth in the US, there is growing concern that the country’s economic success isn’t being translated to the economic well-being of Americans. This report examines the share of Americans in financial distress in 2017. The study finds that a third of moderate-income adults experienced financial insecurity in the past 12 months and many turned to high-interest rate payday loans, auto title loans, or pawn shops in order to alleviate their financial distress.

This report describes how employment does not always guarantee financial stability or shield against financial insecurity. The authors’ study found that among households with two working adults, 23 percent faced some form of financial distress and about 9 percent relied on alternative financial resources to cover expenses. Additionally, the report identifies that workers without job benefits are much more likely to experience economic distress.

As of 2017, the share of young adults (25–34) living with their parents increased to 22 percent from 12 percent in 2000. This estimate indicates that 5.6 million more young adults are living in their parents’ home. This report examines the causes and consequences of this change and the long-term impact on young adults’ wealth and homeownership.